Economic and strategic opportunities to the UK of moving to a more circular economy

597.  Building and expanding industries in the UK: The UK currently exports a significant amount of its waste to be processed overseas. In 2019, an estimated 61% of UK plastic packaging was exported - because of a lack of capacity within the UK to recycle.418 There are concerns that some of this is not actually being recycled.419 The UK must work with global partners on international approaches to this.

598.  Responses to the Call for Evidence suggest there is an economic opportunity for the UK in doing more of our waste processing here.

"By increasing the amount of materials recycled and increasing the proportion of these recycled in the UK, greater carbon reductions can be achieved. Recycling has been a UK success story for the last two decades, delivering significant environmental and economic benefits. However, too much of what we collect is shipped abroad for recycling. Reprocessing it here in the UK instead could contribute 16 million tonnes of CO2e to the 6th Carbon Budget, while adding £8 billion to UK Gross Value Added and creating 60,000 jobs." - WRAP420

599.  In more complex examples of re-use or recycling, there are emerging sectors which the UK has an opportunity to benefit from. As described in Pillar 2, the availability of critical minerals is likely to be a strategic challenge as the global economy decarbonises. This was the focus of the UK's 2022 Critical Minerals Strategy, which describes how "some high potential waste streams, such as electric vehicle motors, electric vehicle batteries, hydrogen fuel cells and wind turbine magnets, are still relatively low volume but will accelerate in the coming decades."421 Attendees at the Review's roundtables were aware of the economic opportunities these provide.422

600.  More broadly, evidence provided to the Review suggests that policies to move to a circular economy, maximise resource efficiency and improve waste measures could increase GDP by 0.9% by 2035, creating over 200,000 gross jobs in the UK and reduce unemployment by about 54,000 jobs by 2030.423

"[The] implementation of ambitious circular economy scenarios could generate a 'win-win-win' scenario where GDP increases, CO2 emissions decrease, and jobs are created [...] Government could help to create over 450,000 jobs in the circular economy by 2035 in reuse, repair, and manufacturing across the UK" - Green Alliance424

601.  The circular economy is already providing economic opportunities: almost 90,000 new jobs were created in the circular economy across the UK between 2014 and 2019, taking the sector to almost 560,000 employees.425

602.  An ambitious circular economy is likely to offer geographically dispersed employment across a range of different occupations - in particular, reuse and open loop recycling activities are likely to be the least concentrated, requiring activity at local and regional levels.426

603.  Reducing costs: Money is being wasted on throwing things away or failing to re-use or refurbish them; more efficient use of resources can also bring immediate direct benefits to businesses.

"There is evidence that UK businesses could realise resource efficiency savings of at least £3 billion per year at low or no cost. The move to a more resource efficient economy can have significant positive impacts on the UK economy and could deliver an increase of up to £76 billion in Gross Value Added by 2030, whilst also improving resource security427

"Product lifetimes can be extended through simply making more use of the products we already have or passing them on to others to use. WRAP's 2022 report Seven Steps Towards Net Zero shows that increasing refurbishment of products could add over £70 billion to the UK GVA, and create over 300,000 jobs, whilst increasing repair could create over 30,000 jobs, add £3.3 billion to UK Gross Value Added, and revitalise city centres.

"The hospitality sector food waste costs the industry £3.2 billion a year and 75% of the food waste could have been eaten." - WRAP428

604.  Helping consumers to reduce waste and make more sustainable purchasing decisions can save them money and ensure the products they buy are more efficient, durable, and cost-effective. Pillar 5 explores how consumers can be supported to engage in the circular economy.

605.  Strategic advantage. There are clearly strategic advantages to the UK from having the capability to re-use and recycle materials where the supply is limited or subject to global competition.

"The transition to a circular economy offers a solution to break the link between economic growth and unsustainable resource use that is driving nature degradation. In addition, a set of key resources like metals are usually not recovered and reintegrated into production, instead being downcycled or exported as waste. This has left us more vulnerable to supply chain disruptions and rising commodity prices which are a key driver of inflation - non-energy prices, including agriculture and metals, are projected to increase almost 20% in 2022, remaining well above the most recent five-year average and wheat prices are forecast to increase more than 40%, reaching an all-time high in nominal terms this year". - Aldersgate Group, The Green Line429

606.  Pillar 2 refers to some of the potential uses of biogenic and non-biogenic wastes and residues, which offer significant circular economy opportunities. This includes, for example, the use of agricultural slurry in anaerobic digestion, use of forestry residues in wood pellets or different types of wastes and residues in the production of fuels. To ensure we use these resources sustainably and extract maximum value, it is important for government to set clear expectations of priority use order, including as part of the upcoming Biomass Strategy, and ensure compliance with the waste hierarchy.

607.  As well as pressure on virgin commodities, other economies are moving to using resources in a more circular way. We should ensure that we are extracting maximum use from domestic waste streams:

"Expedite the delivery of separate collections of food and garden waste for households and businesses, so that the UK can invest in new facilities to deal with the increased volumes and enable the production of renewable energy and renewable fertilisers and soil improvers." -  Association for Renewable Energy & Clean Technology (REA)430

608.  Stakeholders raised challenges around sharing of commercially sensitive information about supply chains and resource use. There have been a number of initiatives providing an independent service to address this challenge: